Financial Wellness Landscape Analysis:
An Overview of the Need for
Workplace-Based Financial Wellness Programs
Executive Summary ..................................................................... 3
The Financial Wellness Landscape............................................... 4
American workers living paycheck to paycheck ........................................4
Financial literacy and money management ...............................................5
Payday loans and their effect on workforce productivity...........................5
Credit card debt ........................................................................................6
Financial Distress: The Impact on Employers
and the Workforce ...................................................................... 7
Financial stress and health ........................................................................7
Financial stress as a workplace distraction................................................8
Employee turnover effects.........................................................................8
A Financial stress and 401(k) participation and loan usage ......................8
Employer Strategies for Improving Financial Wellness............... 9
What is ﬁnancial wellness? .......................................................................9
What are the components of workplace-based
ﬁnancial wellness programs? ..................................................................10
How Employers Beneﬁt from Offering Financial
Wellness Programs .....................................................................14
How Employees Beneﬁt from Financial
Wellness Programs .....................................................................16
Potential Obstacles for Employers .............................................17
End Notes ...................................................................................19
Ex ec uti v e Sum m ar y | 3
Employers have long
sought to both maximize
productivity and maintain a
strong and productive
workforce. Employers are
increasingly looking to
beneﬁts packages as a
means to leverage a more
productive workforce, with
emerging as a priority.
Financial wellness programs – which may include a variety of innovative
products, professional services, and ﬁnancial education tools – can help
employers improve their bottom lines by:
and sick-time usage
and employee loyalty
reducing ﬁnancialrelated stress
401(k) loan usage
Financial wellness programs succeed by offering a range of options that
employers can choose from to meet the speciﬁc needs of their respective
workforce. These programs offer tremendous potential for an employer to
improve the ﬁnancial wellbeing of its employees while beneﬁtting from a
substantial return on investment.
4 | The F i n a n c i a l Wel l n ess La n d scap e
Americans need ways to
help them increase their
ﬁnancial stability and
security. This challenge is
not limited to the lower
thresholds of income.
Workers at all income
levels struggle in their
abilities to manage money,
decisions, improve their
credit, and build assets.
American workers living paycheck to paycheck
Americans are struggling to save across income levels. A recent survey found
that approximately two-thirds of American workers were living paycheck to
paycheck in 2012.2
Additionally, according to a 2013 study, approximately 43.9% of American
households are liquid asset poor – they do not have the savings to be able to
sustain their most basic expenses for a period of three months in the case of a
loss of income.3 Families who are liquid asset poor lack the necessary resources
to weather a ﬁnancial emergency or manage unexpected expenses such as
illness or car repairs. As a result, consumers may accumulate credit card debt, or
turn to high-cost and often predatory ﬁnancial services such as payday loans.
Did You Know?
Less than half of low
and moderate income
families have emergency
savings of at least $500.1
Percentage of employees
who have already used
money in retirement plans
for expenses other than
retirement – shown by age
Source: PWC Employee Financial Wellness Survey 2012 Results
The F i nanc i al Wel l nes s L ands c ape | 5
Financial literacy and money management
Americans also lack conﬁdence in their ability to manage personal ﬁnances overall.
The 2012 Consumer Financial Literacy Survey found that 80% of Americans believe
that they could beneﬁt from information and advice from a professional about
everyday ﬁnancial questions.4 More than half of Americans do not have a regular
budget, including 22% of consumers who report that they do not have a good
idea of how they are spending their money.5
Poor money management knowledge and habits also impact consumers’ long-term
stability. Those with lower levels of ﬁnancial literacy are less likely to save for
retirement, or to be able to make informed decisions about long-term investments.6
Payday loans and their effect on workforce productivity
Payday loans, which can send participant consumers spiraling into ﬁnancial distress,
are used by 12 million Americans each year, at all income levels, but primarily by
those in lower income brackets.7 The median annual income of a payday loan
borrower has been estimated to be as low as $20,000 and as high as $50,000.8
Payday loan users are often indebted for more than half of each year in which they
borrow, with an average of nine transactions at annual interest rates surpassing
400%.9 In addition, payday lending has been shown to contribute to the loss of
bank accounts, increased bankruptcy ﬁlings, ﬁnancial hardship, and credit card
delinquency.10 Ultimately, payday loans have the potential to create and contribute
to ﬁnancial crises among the consumers who use them.
Despite these jarring statistics, the strength of the industry indicates that there is a
need in the marketplace for short-term loans that meet consumers’ need for
products that are easy and quick to access.11 According to the FDIC 2011 National
Survey of Unbanked and Underbanked Households, consumers, even those who
are banked, use payday and pawn shop loans because it is easy to become
approved for this type of credit. About twenty percent of households surveyed also
reported using these types of credit because they did not perceive that small-dollar
personal credit was offered by their bank or credit union.12
States across the nation are adopting stronger policies to curb predatory lending.
Currently, 19 states have capped the maximum APR on short-term consumer loans
at 36% or lower.13 However, many states are still without consumer protections,
while states that do have regulations have seen a rise in online businesses offering
similar products. In response, many banks, credit unions, nonproﬁt organizations
and socially responsible businesses across the country have been working towards
creating better and more affordable alternatives to payday lending to meet
6 | The F i n a n c i a l Wel l n ess La n d scap e
Credit card debt
The average credit card balance among households that carry credit card debt is
$7,100.14 High debt loads and an inability to repay are contributing to declining
credit ratings; in fact, 56% of American consumers have subprime credit.15 Debt
has been shown to have implications on consumers’ mental health including lower
self-esteem, lower productivity and higher levels of stress.16 In addition to the
impact that debt has on consumers’ mental health, low credit ratings are
preventing households from building assets and saving for retirement.
With difﬁculty managing cash ﬂow – and with high debt loads – Americans are
struggling to save. The realities of liquid asset poverty are preventing workers from
maintaining a safety net for ﬁnancial emergencies and unexpected expenses or to
work towards general savings goals such as for vacations or holidays.
Without the ability to save for short-term purposes, Americans are also having
trouble building assets by investing in long-term savings goals such as college
education or home ownership. The median net worth in America was $68,948 in
2010, a decline of $27,000 since 2006.17
Not only are Americans not saving, but they are not conﬁdent in making decisions
about how to save their money. About half of American working adults, women
more so than men, report feeling uncomfortable about selecting investments.18
Here again, workers at all income levels struggle with their decisions.
American workers’ conﬁdence in their ability to retire is at a historical low, with
only 58% reporting that they currently save for this purpose.19 A survey of
household savings and investment activity (excluding their primary home and
deﬁned beneﬁt plans) reveals that 60% of workers report total investments of
$25,000 or less, and of those, 30% state they have saved less than $1,000.20
Lack of access to institutional savings mechanisms may be one of the biggest barriers
to saving. Empirical evidence suggests that, with the right ﬁnancial products and
services, even low-income households can save and accumulate assets.21
F i nanc i al D i s tres s : The I mpac t on Empl oy ers and the Wor kf orce | 7
The Impact on Employers and the Workforce
Financial stress and health
There is a strong correlation between a person’s ﬁnancial and physical health.
Financial stress is signiﬁcant in the majority of people’s lives: 75% of those
surveyed named money as their number one source of stress.22 In addition, 1 in
4 American workers are seriously ﬁnancially distressed,23 constituting more than
30 million workers who may be absent from or distracted at work as a result.24
In addition to the direct health consequences of high stress levels, stress can also
lead to unhealthy coping behaviors, such as tobacco and alcohol use, and
decreased physical activity that can result in further health problems.25 High levels
of stress related health problems tend to correlate with socio-economic status; in
low-income communities, where people face chronic stressors related to poverty,
stress-related health problems and unhealthy coping behavior tend to be high.26, 27
The result? Employees’ rates of sick day usage and absenteeism reﬂect the cost of
addressing stressful ﬁnancial situations or health-related issues. Employers absorb this
impact through higher costs associated with health care, and managing through
workers’ absence. They recognize these costs, too. In a recent survey of employers,
58% believe that “ﬁnancial illness” plays a role in employee absenteeism.28
The High Cost of Low Wellbeing
When it comes to reducing health care costs, employee wellbeing has a direct
impact on a company’s bottom line. Employees who are thriving in overall
wellbeing have 41% lower health-related costs compared with employees who
are struggling and 62% lower costs compared with employees who are suffering.
Annual Health-Related Cost to Employer
(Disease Burden and Unhealthy Days)
Controlling for demographic differences at baseline
The costs of ﬁnancial
distress extend beyond an
employee’s bank account.
Financial challenges and
ﬁnancial distress impact
a worker’s health,
stability, and ultimately,
an employer’s bottom line.
1 in 4 American
workers report that
they are seriously
4 in 5 American
some degree of
savings are the
leading causes of
8 | Fina n c i a l D i s t re s s: T h e I m p a ct o n E mp l o yers and the Workforc e
Financial stress as a
Financial stress and 401(k)
participation and loan usage
Employers not only lose money when employees are absent
from the workplace; ﬁnancially distressed workers are more
likely to be distracted by money-related stress while on the
job, either by attending to personal ﬁnancial business, or
discussing these issues with coworkers.
Without the resources to address ﬁnancial emergencies and
manage high debt loads, ﬁnancially distressed workers may
reduce or discontinue 401(k) contributions, or take 401(k)
loans, depleting retirement savings and disturbing the
balance of an employer’s 401(k) portfolio.
The vast majority of workers (97%) admit that they have
thought about or managed their personal ﬁnances during
work hours.29 For the most ﬁnancially distressed employees,
this activity can amount to up to 20 hours per month spent
negotiating with creditors, paying bills, and discussing
ﬁnancial issues with coworkers.30, 31 In a recent survey of
employers, 83% said that employee productivity was
impacted by concerns about ﬁnancial problems.32
Immediately following the recession, the percentage of
401(k) loan usage increased. 2009 and 2010 data shows that
21% of employees on an eligible plan had an outstanding
loan balance, up from 18% in 2008.37 The average ratio of
outstanding loan to 401(k) balances is 14%.38 These changes
in 401(k) contributions and loan usage can affect the balance
of contributions for highly and lower compensated
employees that are required by nondiscrimination tests.39
Employees who take out 401(k) loans must then manage the
burden of additional debt payments, while those who
withdraw funds face high penalties and may compromise
their long-term ﬁnancial resiliency.
Employee stress and distractedness due to personal ﬁnancial
issues can also be costly to an employer when it results in loss
of workplace productivity, employee turnover, worker
compensation, and other medical related costs.33 In fact,
American companies lose more than 300 billion dollars a year
due to stressed employees at work.34, 35
Employee turnover effects
In addition, ﬁnancially stressed employees may leave their jobs
because their ﬁnancial stress gets in the way of their ability to
perform their job, or because they are changing jobs often,
looking for short-term gains or income boosts in order to deal
with ﬁnancial issues. The cost of replacing an employee can
range from1.5 and 2.5 times the annual salary of the incumbent
worker, with training costs alone adding up to $1,200.36
Empl oy er Strategi es for I mprov i ng F i nanc i a l Wellness | 9
for Improving Financial Wellness
As research indicates, ﬁnancial stress and instability can be costly to organizations
and their employees. However, an organization’s efforts to increase its employees’
wellbeing can help to reverse some of those costs. A person with a high level of
wellbeing is likely to have high productivity and as a result is far less costly to an
employer.40 Whereas an employee with self-reported low wellbeing can cost an
employer as much as $28,800 in lost productivity annually through sick day usage
alone, employees who have high levels of wellbeing may cost an employer as
little as $840 per year in lost productivity.41
In response to this information, more employers are turning to ﬁnancial
wellness programs that, like traditional physical wellness programs, place an
emphasis not only on the treatment of stressors and difﬁculties, but also on
prevention and behavior change.
What is financial wellness?
Just as ﬁnancial stress impacts people at all income levels, ﬁnancial wellness can
be a characteristic found across the income spectrum.42 More than income
generation alone, ﬁnancial wellness or wellbeing encompasses a variety of
factors affecting an individual’s ﬁnancial health, such as ﬁnancial capability
levels and behavior, ﬁnancial status and stressors, and personal characteristics.
Some of the factors that determine an individual’s ﬁnancial wellness may be
ﬁxed, while others such as ﬁnancial capability levels and behavior offer
opportunities for change, and ultimately improvement in an individual’s
ﬁnancial and overall wellbeing.
Financial wellbeing involves deploying successful money management strategies
to spend money wisely, and create ﬁnancial security. This is critical to reduce
day-to-day stress and anxiety and ensure a degree of both short- and long-term
economic freedom to achieve a desired standard of living.43
Financial wellbeing is not isolated from other elements of one’s life – rather, it is
interconnected to more holistic wellbeing, along with physical, social, career,
and community satisfaction.44
What we found was
that ﬁnancial security –
the perception that you
have more than enough
money to do what you
want to do – has three
times the impact of your
income alone on overall
wellbeing. Further, a lack
of worry about money
has more than double
the impact of income on
– Tom Rath and Jim Harter,
authors of "Wellbeing: The
Five Essential Elements"
10 | Em p l o y e r S t r a t egi e s fo r I mp ro vi n g Fi n an ci al Wellnes s
What are the components
of workplace-based financial
Today, employers can choose from newly emerging
ﬁnancial wellness programs to offer their employees a
beneﬁt that goes beyond ﬁnancial education training
and retirement packages. These programs are
designed to address the complex factors that make up
an individual's ﬁnancial wellness, including short-term
interventions to reduce the stresses of daily living as
well as long-term planning to ensure ﬁnancial security.
In addition to offering comprehensive ﬁnancial
support, ﬁnancial wellness programs must also be
designed so that they are easily accessible by users,
generate high levels of initial enrollment, and
maximize ongoing levels of engagement.
In general, employees are less interested in general
ﬁnancial education and more interested in
participating in speciﬁc and relevant topics of interest
to their situation – including debt management,
retirement, and investment planning.45
Components of successful workplace-based
ﬁnancial wellness programs include:
Customized/Personalized to address different
employee’s ﬁnancial concerns based on factors such as
ﬁnancial knowledge, ﬁnancial situation, income, and
debt-load. For example, a ﬁnancial wellness program
may offer access to Personal Financial Management
tools (discussed further below) that provide customized
advice and timely content derived from an analysis of an
employee’s speciﬁc ﬁnancial situation. This personalized
approach to ﬁnancial wellness seeks to increase interest
and continued participation from employees as content
and tools that are delivered are relevant to an individual’s
personal ﬁnancial situation.
Self-directed so that an employee may engage with
the program as much or as little as needed in ways
relevant to his or her immediate ﬁnancial concerns.
Employer-provided ﬁnancial wellness programs that offer
self-directed approaches to ﬁnancial learning have been
shown to improve employees’ ﬁnancial management
behaviors, and increase ﬁnancial and career satisfaction.46
Responsive to changing ﬁnancial situations, including
planned and unplanned ﬁnancial events. A successful
ﬁnancial wellness program will take into account the
diverse range of employee needs for services, and the
fact that those needs will change over time. For
example, a ﬁnancial wellness program may offer shortterm loans for employees who encounter a ﬁnancial
emergency, and investment counseling when that same
employee is ready to begin contributing to a retirement
account. Comprehensive and responsive services will
impact the ability of the program to affect an
employee’s ﬁnancial wellbeing holistically, while also
contributing to long-term use of the program.
Empl oy er Strategi es for I mprov i ng F i nanc i al Wellnesss | 11
Easily accessible to maximize engagement and
continued use by leveraging organizational
infrastructure, innovative technology, and integrating
with other wellness programs. For example, a
ﬁnancial wellness program may be integrated with
the same online database that an employee already
uses regularly to manage other employer beneﬁts
Ongoing by incorporating strategies that encourage
regular participation and help employees build upon
their ﬁnancial wellness over time. For example,
ﬁnancial wellness programs may incorporate
opportunities for participants to set goals and track
them over time as a way of maintaining long-term
engagement and consistent reminders of the services
that the program offers.
Dynamic by offering ﬁnancial tools, relevant and
timely communication of ﬁnancial information, and
two-way channels for employees to be able to access
personalized information and expert advice. As
opposed to merely providing static content on
ﬁnancial topics, ﬁnancial wellness programs create
opportunities for employees to interact with content
and apply their ﬁnancial knowledge to their own
lives. For example, ﬁnancial wellness programs may
offer employees the opportunity to review their credit
reports or consult with a ﬁnancial advisor.
Focused on risk assessment, anticipating and
preventing ﬁnancial emergencies, rather than
responding exclusively to those that already exist.
Financial wellness programs use risk assessment tools
such as initial assessments, credit monitoring and
tailored ﬁnancial advice in order to increase
participants’ ﬁnancial security and ﬁnancial resiliency
when faced with a crisis. In doing so, employees are
better equipped in the case that a ﬁnancial emergency
does arise, and may be able to do so with little impact
on their job performance and/or absenteeism.
Providing access to institutional mechanisms
that promote positive ﬁnancial behavior, such as
access to bank accounts, goal-setting tools,
responsible credit, and investment opportunities.
Financial wellness programs may often serve as a
bridge to traditional ﬁnancial services, especially for
underserved households, by eliminating barriers and
providing the information and access that employees
need in order to increase their ﬁnancial capability.
Improving employee’s access to quality ﬁnancial
services including credit and savings can reduce stress
and overall ﬁnancial stability by helping employees
create safety nets and avoid more predatory, highcost services.
12 | Em p l o y e r S t r a t egi e s fo r I mp ro vi n g Fi n an ci al Wellnes s
Many other factors will also contribute to the success of a customized ﬁnancial wellness program, including the
relationship and trust between an employer and its workforce, the strength, capacity and reputation of the ﬁnancial
wellness program and its ability to meet the needs of a diverse workforce.
The success of a ﬁnancial wellness program will depend in part on its ability to provide
appropriate, dynamic and accessible delivery channels, but also on the quality of content
and delivery of individual program components, which may include:
Financial education, counseling and
planning across income levels. Traditional
ﬁnancial education often entails seminars and
workshops, as well as one-on-one opportunities
to work with a ﬁnancial coach, credit counselor,
or ﬁnancial planner. Today, ﬁnancial wellness
programs may include these elements, with the
major difference being that participants may
have more opportunities to engage on their own
terms. Seminars may be offered via pre-recorded
webinars that participants can watch at their
convenience, or ﬁnancial coaches may be able to
meet with them through email exchanges, virtual
chats, and web-based meetings.
Beneﬁts and retirement counseling. While it is
standard, and required, for employers to offer basic
ﬁnancial education associated with retirement plans, a
ﬁnancial wellness program may go beyond these
requirements and include a more pro-active and
targeted approach to delivering this type of ﬁnancial
education. Activities may include one-on-one personal
budgeting to help employees begin to save for
retirement or to help employees improve deferral rates.
Web based tools including video chat and webinars can
offer wholesale counseling to educate and advise the
workforce on the voluntary and employer-sponsored
beneﬁts available to them—so that each employee can
make informed beneﬁt decisions throughout the year.
Participants can receive recommendations for
services that are most relevant to them. For
example, after participating in a ﬁnancial wellness
assessment or quiz, a participant may be prompted
to begin with ﬁnancial coaching to work on a
budget plan, or to speak with a ﬁnancial planner
about investment options, depending on his or her
particular needs. In combination with appropriate
products and services offered through a ﬁnancial
wellness program, effective ﬁnancial education has
been shown to improve consumers’ credit scores,
increase savings rates and participation in 401(k)
plans, and better prepare consumers for asset
building opportunities such as homeownership.47, 48
Personal ﬁnancial management tools (PFMs). PFMs are
becoming increasingly prevalent as components of
employers’ ﬁnancial wellness programs. These online tools
provide money management features, ﬁnancial education,
and personalized advice. Users can often link bank, credit
card, investment, and other accounts to construct a realtime picture of their personal ﬁnances. They can use this
information in order to make better ﬁnancial decisions,
track progress, and receive information and customized
recommendations. Some PFMs offer incentives for positive
savings behavior, and link to social networking sites in order
to harness the power of social pressure to help individuals
meet their ﬁnancial goals. PFM providers are increasingly
partnering with employers and workplace ﬁnancial
wellness programs in order to provide customized tools
that align with an employee’s ﬁnancial wellness objectives.
Employer Strategies for Improving Financial Wellness | 13
Credit report and identity theft monitoring. In
2012, the majority of American consumers reported that
they did not review their credit score or credit report.49
Yet when this data is paired with ﬁnancial education and
credit building opportunities, it can be an important
component of ﬁnancial wellness, and building assets.
Offering monitoring of credit scores and reports is
another way that workplace-based ﬁnancial wellness
programs are merging quality education with timely and
relevant ﬁnancial products. Employees can receive a
monthly credit report that reﬂects their credit standing,
and provides insight into what actions they can take to
improve it. Some employers also offer additional identity
theft monitoring and protection products.
Employer-based lending programs. Some employers
recognize their workforce’s dependence on high interest
payday and other predatory ﬁnancial services, as well as the
administrative costs of making internal payroll advances. In
response, they may choose to partner with third party
banks and credit unions to offer affordable short-term
credit to employees to help alleviate ﬁnancial stress,
especially when unforeseen events may threaten an
individual’s job security. Employer-based lending programs
have the potential to be highly sustainable and streamlined
by leveraging an employer’s existing infrastructure.
These programs are appealing to employees, too,
as they often combine online platforms, quick
processing, and auto-deduction of payments from
payroll, ultimately offering the ease and
convenience that workers typically seek for short
term borrowing. Furthermore, employer-based
lending programs, which often involve partnership
with a traditional ﬁnancial institution, can
leverage the reputation of a known lender, and
help employees build relationships with local
banks and credit unions.50 While workplace-based
lending programs are often marketed as shortterm emergency products, they can also link with
credit building, savings components, and other
mechanisms that are designed to heighten
employee engagement with multiple elements of
the ﬁnancial wellness program.
14 | Ho w E m p l o y e r s B e n efi t fro m O fferi n g Fi n a nc ial Wellnes s Programs
How Employers Beneﬁt
from Offering Financial Wellness Programs
felt less ﬁnancially
stressed after enrolling
in reduced operating costs
per sick day, per employee
in employer savings from
limiting personal ﬁnancial
distractions in the workplace
With money-related issues being the leading cause of stress for Americans,
equipping employees with tools and resources to increase their ﬁnancial
resiliency through ﬁnancial wellness programs has the potential to reduce the
ﬁnancial challenges that often lead to stress. A recent study of participants in an
employer based ﬁnancial wellness study found that 72% of participants felt less
ﬁnancially stressed after enrolling in the program.51 In addition to increasing
levels of ﬁnancial knowledge through ﬁnancial education strategies, the use of
tangible tools and ﬁnancial products in ﬁnancial wellness programs can
effectively respond to and prevent the events that cause ﬁnancial stress in the
lives of employees.
Employers are recognizing the multiple beneﬁts that accrue, to both their
employees and to themselves, when they offer workplace-based ﬁnancial
wellness programs. Employees with greater ﬁnancial wellbeing are healthier in
general, as decreased ﬁnancial stress helps to reduce the detrimental physical
and mental health effects of stress.52 For employers, this can translate into
reduced operating cost s – on average, $348 per sick day, per employee.53 In
one instance, a large public company reported saving 21.57% on health care
costs for heavy users of a workplace-based ﬁnancial education program over
the course of a year. This amounted to over $1 million in health care savings
among all users of the program. The same company also reported a savings
$837,230 through reduced absenteeism among users of the ﬁnancial
Employees who reduce their ﬁnancial stress also reduce workplace distractions
and loss of productivity. Estimates of potential employer savings from limiting
personal ﬁnancial distractions in the workplace can be as high as $5,000- per
employee, per year.55 Employees who are more focused at work perform better
and are less likely to experience a workplace accident.
How Empl oy ers Benefi t from O fferi ng F I nanc i al Wel l nes s Progr am s | 15
Workplace ﬁnancial wellness programs have also been shown to reduce employee requests for 401(k) loans,
and to inﬂuence increased contributions to retirement savings.56 This in turn can help employers comply with
ﬁduciary responsibilities of retirement packages, create a more desirable balance within a 401(k) portfolio, and
attract talent by offering more generous retirement packages.57
Finally, offering ﬁnancial wellness programs can help employers increase retention and employee
commitment. Offering comprehensive beneﬁts packages helps employers recruit talent and increase
employee loyalty.58 Similarly, offering ﬁnancial wellness programs can help employees mitigate ﬁnancial
crises and maintain job stability once they become engaged. In addition, employees who are able to
increase their ﬁnancial literacy and conﬁdence about their current ﬁnancial situation are more likely to be
satisﬁed in their employment.59
16 | Ho w E m p l o y e e s B e n efi t fro m FI n a n ci al Wellnes s Programs
How Employees Beneﬁt
from Financial Wellness Programs
As prevalent as ﬁnancial stress is across different demographics and income
levels, so is the desire to increase money management skills. According to a
recent global study, 90% of consumers would like to improve their money
management skills.60 A high quality ﬁnancial wellness program can help
employees increase their ﬁnancial capability by offering opportunities to:
4 improve basic money management skills and ﬁnancial
4 increaselong-termfor short-term expenses and emergencies,
retirement plans and investments;
4 decrease stress and improve physical and mental health;
4 support job stability and satisfaction;
4 improve credit scores; and
4 decrease credit costs and debt burdens.
Potenti al O bs tac l es for Em ployer s | 17
Despite the beneﬁts of offering ﬁnancial wellness programs, employers may be
wary of providing them to employees if they’re not guaranteed to cover the
program’s expense through cost reductions and productivity gains.
Costs to deliver a ﬁnancial wellness program usually include initial set up fees and
ongoing program administrative costs. However, these expenses can instead be
viewed as an investment: research shows that the return on investment per
employee for a ﬁnancial wellness program is 3:1.61 This ROI does not include more
long-term and indirect beneﬁts, such as attracting higher-qualiﬁed employees,
increased employee satisfaction, and greater participation in 401(k) plans.
Employers may also be concerned that ﬁnancial wellness programs will not
generate enough employee participation to make them worthwhile or achieve the
desired affects. In many cases, the most likely participants in a ﬁnancial wellness
program will be highly motivated employees, not necessarily those in most need of
assistance. As a result, employers may choose to incorporate incentives to
encourage participation, and develop a culture that accepts the reality that many
do struggle to make ends meet. For example, a common incentive offered by
employers to increase participation in general wellness programs is reduced health
insurance premiums.64 This same approach could be translated to ﬁnancial wellness
programs as well.
Furthermore, ﬁnancial wellness programs often focus on building ﬁnancial capability
versus only ﬁnancial education. Financial capability means pairing tangible ﬁnancial
resources, products and services with ﬁnancial education to maximize the immediate
and long-term impact on consumers through affecting behavior changes. For
example, a ﬁnancial wellness program may offer emergency loans that have the
potential to meet immediate employee needs, and can also serve as a teaching tool
and an opportunity to build assets such as credit or savings accounts.
Financial wellness programs also leverage technology so that participants can have
access to personalized information and tools 24:7, without being limited to only
attending a scheduled workshop or coaching appointment.
18 | Co n cl u si o n
There is a growing awareness of the important role ﬁnancial wellbeing and strategic money
management plays in the lives of employees, and the impact their wellbeing has on their
employer’s success. In response, companies are increasingly adopting ﬁnancial wellness
strategies in order to create healthier, more stable workforce populations. Financial wellness
programs succeed by offering a range of options, services, and innovative tools that employers
can choose from to meet the speciﬁc needs of their respective workforce. Ultimately, ﬁnancial
wellness programs offer tremendous potential for an employer to improve the ﬁnancial
wellbeing of its employees while beneﬁtting from a substantial return on investment.
About the Research
This paper was conceived and developed through an innovative
collaboration with Emerge Financial Wellness. ING Employee
Beneﬁts commissioned Emerge to assist in the development
of this report. For more information about Emerge, visit
Dr. Michal Grinstein-Weiss, Reviewer and Advisor
Dr. Michal Grinstein-Weiss is the associate director of the Center for Social Development at
Washington University in St. Louis.
Grinstein-Weiss is a nationally and internationally recognized expert in the ﬁeld of asset
building, and her research focuses on developing programs and policies to promote
economic and social development of vulnerable groups. Currently, Grinstein-Weiss is
collaborating on ground-breaking studies that examine innovative ways to increase savings
and to promote ﬁnancial security of American households.
Carmina Lass, Lead Writer/Independent Researcher
Carmina Lass is an independent writer, researcher and consultant. She primarily works with
nonproﬁt organizations that improve the ﬁnancial condition of working Americans. Her
research is focused on designing and implementing innovative ﬁnancial literacy curricula, as
well as online educational tool development.
Lass formerly managed the ﬁnancial education programs at Innovative Changes, a nonproﬁt
based in Portland, OR.
E nd Not es | 19
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About ING U.S.
ING U.S. (NYSE: VOYA), which plans to rebrand in the future as Voya Financial, is a premier retirement, investment and
insurance company serving the ﬁnancial needs of approximately 13 million individual and institutional customers in the United
States. The company's vision is to be America's Retirement Company, and its guiding principle is centered on solving the most
daunting ﬁnancial challenge facing Americans today – retirement readiness. Working directly with clients and through a
broad group of ﬁnancial intermediaries, independent producers, afﬁliated advisors and dedicated sales specialists, ING U.S.
provides a comprehensive portfolio of asset accumulation, asset protection and asset distribution products and services. With
a dedicated workforce of approximately 7,000 employees, ING U.S. is grounded in a clear mission to make a secure ﬁnancial
future possible -- one person, one family and one institution at a time.
ING U.S.’s Insurance Solutions business, which comprises its Retail Life and Employee Beneﬁts segments, is a leading provider of
life insurance and medical stop loss in the U.S. The Retail Life business is focused on wealth protection and transfer opportunities
to meet the needs of a broad range of customers from the middle-market through afﬂuent market segments. The Employee
Beneﬁts segment provides stop loss, group life, voluntary and disability products to mid-sized and large businesses and has more
than 90 years of experience in the design, implementation and administration of employee beneﬁts plans.